Answer:
C). Price is very important to business customers.
Explanation:
The chief concern of the business customers is "price" with respect to marketing-related considerations as the supreme goal of a businessman is to make a profit. <em>Therefore, price plays a vital role and thus, it should be taken into account while developing a market strategy for the business customers as they buy the products or services to be used for producing other goods. </em>Thus, price by default becomes a serious concern as a slight alteration or fluctuation in the prices may lead the businessman to incur either a huge loss or disappointment of the consumers. Thus, the price is quite significant to them.
Answer:
The firm paid taxes of $0.5 million
Explanation:
Profit margin is the percentage of net income to its sales. It is calculated as follow:
Profit Margin = ( Net profit / Sales ) x 100
20% = (Net profit / 5 million) x 100
(20/100) x 5 million = Net profit
Net profit = 1 million
EBIT is the earning before the payment of interest expense and tax. It is the net of Gross profit and operating expenses.
net income is calculates from EBIT as follow
Net Income = EBIT - Interest expense - Tax
1 = 1.5 - $0 - Tax (ignoring the effect of financing)
Tax = $1.5 - $1
Tax = $0.5 million
Answer:
Annual demand (D) = 100 sheets
Ordering cost (Co) = $45
Unit cost = $10 (assumed)
Holding cost (H)= 20% x $10 = $2
This is an incomplete question. Unit cost was omitted in the question. Thus, $10 is assumed.
EOQ = 2DCo
H
EOQ = 2 x 100 x $45
2
EOQ = 67 units
Explanation:
EOQ is the square root of 2 multiplied annual demand and ordering cost per order divided by holding cost per item per annum. Holding cost is usually a function of unit cost. The unit cost was not given. Thus, a unit of $10 is assumed. Holding cost is 20% of unit cost.
Answer:
The market value of the stock is $132.73.
Explanation:
D0 = Dividend just paid = $4
D1 = Anticipated next year dividend or Year 1 dividend = $6
D2 = Dividend of in the subsequent year or Year 2 = $7
D3 = Year 3 dividend = D2 * (100% + Dividend growth rate forever) = $7 * (100% + 5%) = $7.35
Sum of present values of D1 and D2 = (D1 / (100% + required rate of return)^1) + (D2 / (100% + required rate of return)^2) = ($6 / (100% + 10%)^1) + ($7 / (100% + 10%)^2) = $11.2396694214876
Stock price in year 2 = D3 / (Required rate of return - Dividend growth rate forever) = $7.35 / (10% - 5%) = $147
Present value of Stock price in year 2 = Stock price in year 2 / (100% + required rate of return)^2 = $147 / (100% + 10%)^2 = $121.487603305785
Market value of the stock = Present value of Stock price in year 2 + Sum of present values of D1 and D2 = $121.487603305785 + $11.2396694214876 = $132.73
Therefore, the market value of the stock is $132.73.
Answer:
East Division operating income = $900,000
Explanation:
Profit margin = Net operating income/Sales
Asset turnover = sales/average operating assets
0.80= x/7,500,000
x = 7500000*0.80
= 6000000
Thus, sales = 6,000,000
Profit margin = net operating income/Sales
15% = x /6,000,000
x= 6,000,000*15%
=900,000
Net operating income = 900,000